Future of South Stream pipeline “gloomy”

Rome - The future of the South Stream pipeline project to carry Russian gas to Europe has been put in question by the escalating dispute over Ukraine, the chief executive of Italian oil major Eni said on Thursday. The future of the pipeline is “somewhat gloomy”,Paolo Scaroni said during a parliamentary hearing in Rome

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Rome - The future of the South Stream pipeline project to carry Russian gas to Europe has been put in question by the escalating dispute over Ukraine, the chief executive of Italian oil major Eni said on Thursday.

The future of the pipeline is “somewhat gloomy”, Paolo Scaroni said during a parliamentary hearing in Rome. The massive South Stream project, which would be able to supply over 60 billion cubic metres (bcm) of gas to Europe, is seen as crucial for Russia’s ambitions to cement its position as Europe’s dominant gas supplier.

But Russia’s seizure of the Crimea region from Ukraine has heightened tension between Moscow and the West, prompting the European Union recently to say it planned to delay talks over the project.

The 2,400 km (1,500-mile) pipeline, led by Russia’s Gazprom , is expected to be fully operational by 2018 at an estimated cost of around 17 billion euros ($23.4 billion). Besides Gazprom and Eni the other shareholders in the project are France’s EDF and Germany’s Wintershall.

Scaroni said the Ukraine crisis could threaten the complex permitting process for the pipeline which will bypass Ukraine, running through the Black Sea and a number of European states.

“It will put into question the many authorisations that European countries must give to complete the project,” Scaroni said. Russia has long sought to cut its reliance on pipelines crossing Ukraine, the route for roughly half of its gas exports to Europe. Earlier this month Gazprom said Italy’s Saipem had secured deals worth 2 billion euros to build the first stage of the underwater pipeline.